A framework is developed in which inflation biases with different target variables are compared. A nominal growth target measured in consumer prices may yield less stabilization bias than a nominal income growth target. Exchange rate and inflation targets result in less stabilization bias than...

During the Asian crisis, a rise in short-term for debt relative to short-term debt denominated in domestic currency results in a significant decline in negative exposure of Korean firms, with Chaebol firms able to benefit more. Exposure of non-Chaebol firms is significantly affected by maturity...

When central bank preferences are uncertain, delegation implemented by inflation or exchange rate targeting may be superior to delegation implemented through an inflation contract combined with an optimal inflation target. Distortion introduced by uncertainty about preferences into stabilization...